When Michael Grade replaced Charles Allen as the head of ITV, the sense of relief was almost tangible. Allen's approach - maintaining profitability by cost cutting and seeking regulatory relief in the face of declining on-air performance and difficult market conditions - seemed to have run out of road. What ITV needed was a creative leader and a strategy for the new, digital, multimedia world. And Grade certainly talked the talk, with a "content-led" growth strategy that would see global production and distribution revenues double to £1.2bn. Half of that increase would come from filling more of ITV's schedule with in-house programming - up to the 75% maximum was the stated aim - which the company would then make hay with in global markets. Yes, ITV's traditional broadcasting business needed to combat falling reach and share, but the promised increases in production and online revenues were a reason for investors to see ITV as a good long-term bet.

And yet, just 18 months on, last week's interim results had Michael Grade reading a script that could have been written for his predecessor. Having admitted that the ambitious targets in production and online were now not going to be met, he railed against an "Antiques Roadshow of regulation" from which he demanded immediate relief - as well as offering up a further £35m a year of cost cuts to placate investors. Grade was able to point to significant improvement in ITV's on-air performance - better than its commercial competitors - but much of that has arisen from schedule alterations and plans developed under the old regime.

So what is it about ITV that has turned Michael Grade into Charles Allen? Both men - although only Grade is noted for it - alighted on content as the key to corporate growth. ITV is essentially two businesses. The broadcasting side generates the lion's share of the revenues and 80% of the profits, but given the market conditions spawned by digital developments it cannot grow substantially. The content side is smaller but has in theory the capacity to grow. The problem is that, like Allen, Grade has not convinced investors that he knows how to make that happen, or is prepared to do what's necessary.

If content is to be the source of long-term growth then there needs to be joined-up thinking between broadcasting and production - using ITV on air to create programming brands that can be exploited globally. This might mean favouring in-house productions over independent suppliers, and encouraging the content division to sell shows to broadcasting competitors. But both of these strategies might damage ITV's on-air performance in the short term - and neither Grade nor Allen have been prepared to go there for fear of frightening investors. What's more, on the evidence of last week's announcements, Grade's "content-led" growth strategy is not just moving slowly - it's going backwards. Production by ITV for its own network has fallen to an all-time low of 45%.

So there you have it: network performance improving but in a market on the brink of a downturn, a growth strategy that's stuck and a share price that's dropped 65% since the current executive chairman took over. If what little shareholder confidence remains is to be retained, then short-term profitability must be the priority. And there's only two places that's going to come from - regulatory relief and cost-cutting. We even heard briefing to the effect that Michael Grade was the right man to lead ITV at this time on account of his close relationships in the corridors of power - so helpful when seeking regulatory relief. Sound familiar?